Great, good morning everyone. My name is Ted Tenthoff. I am the Senior Biotech Analyst here at Piper Jaffray. And before I begin, I am required to point out certain disclosures regarding the relationship between Piper Jaffray and Sarepta, which are posted in the back of the room and also at the registration desk.

It’s been quite a rollercoaster ride over year for Sarepta. In the summer, the FDA pared willing to review an NDA filing for the Duchenne muscular dystrophy drug, eteplirsen, only to turn around and pull the carpet out from under the feet last month stating that the filing would be premature.

Here with us today is Chris Garabedian, President and CEO of Sarepta; also Sandy Mahatme, who serves as CFO; and Erin Cox, who is the Manager of Corporate Communications and Investor Relations.

Thank you all for joining us. I am sure there is going to be a lot of questions, but if you would, let me get the ball rolling a little bit, but if you do have any questions don’t hesitate to raise your hand and we’re happy to bring into the conversation.

So Chris, all along you’ve stated that the plan was to submit an NDA for accelerated approval of eteplirsen based on the phase IIb data. What happened between this summer and November that caused the FDA to change its stance?

Chris Garabedian

Yes. Ted, thanks for the opportunity to be at your conference and for Piper for the invitation.

So we met with the FDA last in July, and we put out a communication on July 24. We then requested a meeting to try to confirm or finalize the details of our confirmatory study and that meeting took place on November 8.

Between that July meeting and when we met on November 8 and received the pre-meeting comments just before that meeting, the FDA informed us that new information that they had availability to, had been reconsidered some of the earlier communications and guidance they had provided us.

The two main things that they cited were the failed drisapersen phase 3 study. They did reference along with negative reports, so that one they cited, another dystrophin producing technology, but that was one of the primary ones that made them call over the question the biomarker of dystrophin that they described it.

The second one was recent natural history data. Although they did not provide any attribution of reference to that, the actual natural history data they described was from a recent publication by Craig McDonald and they cited that but didn’t cite for example two other publications that came out this year on natural history.

So those were the two pieces of information they cited that had been questioned are, dystrophin as well as the support of 6-minute walk data.

Ted Tenthoff – Piper Jaffray

So let's take these one at a time. First on the failed phase 3 drisa study. There is clearly some differences between eteplirsen and drisapersen. Walk us through what some of those differences are, whether it be kind of therapeutic index or whatever, but why do you think these drugs are different and why do you think that they should be viewed differently?

Chris Garabedian

Yes, so we believe these drugs are distinctly different and have a different activity profile. And so we, in our first meeting in November 8, we used that opportunity to address some of the comments that the FDA provided, really where they attempted to paint eteplirsen with the same brush as drisapersen. And so what we did was we shared data that was available.

The first piece of data we showed was an article that was published by the Leiden researchers which showed that controlling for all other variables that our chemistry had a multi-fold better activity in the dystrophin mass model across all muscle groups. They also did work in a cell line of exon 51 patient cells.

So that just showed our chemistry alone had a multi-fold greater exon-skipping and protein production. We had internal data that showed that our sequence compared to their sequence, all other things being equal had multi-fold greater activity than their sequence. And then we showed that our dose was five to eight fold greater dose. So when you add all that up, right, it might translate to a 100 fold or more, greater active product that was in the clinic versus theirs.

And then we went in and pursued to show the publicly available information on dystrophin that was made available. And so we showed for example that in our 0.5 mg/kg study that we did in the U.K. we had a 100% exon-skipping, their 0.5 mg/kg did not show exon-skipping that was published in New England Journal. And then we highlighted for example the World Muscle data that they shared, which I just pulled up here that shows that on western blot for example, 61% of patients in the continuous treatment arm in their phase 2 showed no increase.

When you look at our exon-skipping by RT-PCR, only 12% in the 6 mg/kg showed an increase by western – by RT-PCR. We showed a 100%, okay, on RT-PCR in all of our patients that have been studied. So there are the things that we believe the FDA was premature in that.

Ted Tenthoff – Piper Jaffray

So efficacy is one side of this equation. Just to dig in a little bit deeper on here is, the other is safety, which is what delivers the therapeutic index. And we know from the Isis chemistry about some of the proinflammatory cytokines that are developed with the negatively charged backbone, that’s one of the benefits of PMO is it’s neutrally charged and I think we’ve seen a much cleaner safety profile. We haven't seen all of the data yet, but how did safety factor in just with respect to either dose continuation, dose reductions. Again we don’t know that data yet, but I think we have to assume that that’s part of [indiscernible].

Chris Garabedian

Yes, well we know that they likely did not pursue higher doses because of dose-dependent toxicities. As related to our dataset, I think the FDA has acknowledge our favorable safety profile, and safety has not been a major concern that’s been brought up as why they are uncomfortable with this program and the conclusions that might be drawn. I think they acknowledged the differentiated safety profile.

Ted Tenthoff – Piper Jaffray

So you mentioned as a second factor is this publication by Dr. McDonald, but walk us through what that finding was? And I still think just from people that I’ve talked to in the community that there is still kind of some questions about segmentation of the boys by age, but there are still some questions around this data. So was the FDA premature to kind of jump at this new piece of data as a reason?

Chris Garabedian

Yes. We actually think they were premature. And the reason is that they were very selective in the natural history that they cited. So for everybody’s benefit the data that they cited was from a recent McDonald publication that was based on the ataluren placebo arm. And we think there is a few problems with that. First of all, the ataluren study included Becker muscular dystrophy patients.

In fact, they included three genotypes the majority of which were the UGA genotypes, which Richard Finkel has a publication that says that can product a Becker phenotypes. So we don’t know truly how many of Becker phenotypes were in that study, but many of them had higher baseline values and would even be qualified for our study or would be consistent with the DMD population.

Secondarily, the stop codon mutation population has been described by Eugenio Mercuri at World Muscle in a presentation as one of the more milder phenotypes of DMD. And so we think that they should have been looking more closely at the Mercuri, Elena Mazzone natural history that was a two-year study that was published this year or the Nathalie Goemans publication, another two-year study that included exon deletion patients that we have in our study, but more important than that, we have the GSK placebo arm which is exactly the population that we’re studying of which declined by 83 meters in the greater than seven year old population.

Now they have not shared the details of that, but if we assume that all of the patients who they did disclosed went non-ambulant were over seven, that’s 20% with non-ambulant. If you factor those out, we still would calculate a decline of 50 meters or so even taking out the non-ambulant. So for all these reasons, we think there is so much evidence that says even after a year, the patients in our study would have declined and now we have essentially almost two-year data that we’ve disclosed that shows stability.

So we think the FDA was premature in their conclusion. Having said that, the pre-meeting comments that we disclosed were before we had an opportunity to respond or make them reconsider some of the conclusion, and now we’ve had two meetings of which meeting minutes would be issued in December that would be the product of the two meetings where we got to discuss some of the things I’ve just described on both dystrophin and on 6-minute walk natural history.

Ted Tenthoff – Piper Jaffray

Now do you have another meeting coming up with the FDA next month as well, right?

Chris Garabedian

Yes.

Ted Tenthoff – Piper Jaffray

So tell us about again what – you’ve kind of touched on some of the things that you’re bringing to this meeting, but what is your goal from that next meeting with the FDA? What is sort of on the dock and what are potentially outcomes from that?

Chris Garabedian

Yes. So yes, we've got some very good responsiveness from the FDA. The fact that they have scheduled three meetings in a span of two months is impressive to us and shows that they have a level of urgency and interest in moving this program along. The priority right now is to come to an agreement on a confirmatory study design.

So this is – December meeting would be continuing those discussions to try to come to some resolution around an acceptable confirmatory study. It’s not clear, if we can get finalization of that in the December meeting or if it will take subsequent meetings even going into the next several months into the first quarter of next year, but that’s a priority and we’re approaching it in a collaborative fashion and trying to use every opportunity to share our view and are thinking about that confirmatory study design.

Ted Tenthoff – Piper Jaffray

So you’ve been vocal that enrolling a placebo controlled setting would be difficult. Why is this? And if you would kind of lay out the differences, what is your envisioned phase 3 study and where does the FDA have problems with their view and what are the key issues to get to resolve the design of the track?

Chris Garabedian

Yes, so because right now our freedom to operate in Europe is challenged and we have filed a patent appeal with the European Patent Authority to try to reverse their ruling from November 2011. We’ve looked at where we have the best case for its operators in the U.S. so we’ve really done surveys. We’ve done a lot of research on how many patients might be available for a clinical trial.

We’ve also look at the epidemiology. So let me do the simple math, okay, to bring to the conclusion of why we think a 100 or 120-patient study would be hard to enroll. If you assume and I would say generously there is about 1,800 patients. This is based on the CDC one out of 3,500 patients that they report. There are other reports that say the prevalence is less than that, but let's assume there is 1,800 patients that are amenable to exon 51.

Their life expectancy is 25 years. If you take the age cohort, then everybody seems to agree is the right one to 6-six minute walk, let's say seven to 12 years of age. That’s let's call it 20% of that overall population. If you then say which seem to be consensus that you need to narrow the band of baseline 6-minute walk, some say you shouldn’t enroll patients below 350 or 330, I think that’s a little severe and let's say we don’t include patients below 300.

And some say – many say, don’t include patients too healthy, over 400 or over 450. So if you take that narrow band of baseline 6-minute walk of let's say between 300 and 450, that’s let's say 30% of that age cohort. You start to get into numbers that might be about a 100 patients or so total. That’s what out-factoring let's say those who are cognitively impaired, maybe 30% of those wouldn’t be able to administer the clinical test because of cognitive impairment.

This is without even taking into account the GSK try to recruit as many of these patients as possible. They cut off their enrollment early. They were hoping to do about 54, they found 51. So if we know the risks of including drisapersen exposed patients for toxicity, baseline dystrophin complications factoring that in, or even the prospect not suggesting but the prospects of immunogenicity and rendering inactive and that’s 50 or so patients that we were cut out of that.

We think it would be hard to enroll the 60 patients we proposed, but we think we could try that especially if it was an open-label arm and could be powered all of those patients receiving treatment versus let's call it an untreated control of similar size, 60 patients or so, we think that was well powered to show a 30-meter benefit, okay, against that untreated control.

And we now have the benefit of more natural history that we’ve ever had that we can do a meta-analysis on that and we now have a third comparison, the GSK placebo arm that the FDA can cut that, okay, when they get that data to say here is what we saw in a similar cohort of patients.

We think a fourth comparison of placebo was infeasible and not necessarily, but we’ll then work with the FDA to figure out if we could resolve how we could have a placebo controlled study, but that’s why we proposed the study we did, that’s why we were adding in about avoiding a placebo control more because of the feasibility of enrolment.

Ted Tenthoff – Piper Jaffray

I appreciate that. So it’s really just a matter of not having enough boys out there to turn on the study.

Chris Garabedian

Yes.

Ted Tenthoff – Piper Jaffray

That’s actually very clear. I think that’s helpful. You’ve said that kind of with some of these recent developments it’s likely or you would hope to begin confirmatory study in the second quarter of next year. Why the delay? Is it really about finalizing the trial and what’s the most recent on the manufacturing side?

Chris Garabedian

Yes. So the delay was caused because we had been gearing up. We proposed the study synopsis to the agency back in February of this year. We received some preliminary comments, but not detailed comments, that seemingly suggested support at the study with the exception of what I had disclosed previously just build around do you need also a placebo arm.

So we had prepared two protocols to be submitted to IRBs. One with the placebo arm, one without, but we were trying to make the case that if one missed and how it would be compromised if we had to reduce the sample. So we thought we could still start dosing in the first quarter if we had resolution from the November 8 meeting.

They raised a lot of questions and even introduced new designs, and on top of that, raised question about dystrophin and dystrophin methodology to a greater degree citing increasing concerns and considerable doubt about the biomarker. We still believe we need to capture dystrophin for the sake of our broader program and the future exons where you can’t enroll enough patients to power for clinical outcomes.

So we need to get resolution on dystrophin as well, before we can start that study. And so for all of those reasons, and the time it takes to prepare a final protocol, submit to IRB select site, screen patients out etcetera, we felt that the earliest we could see that happening is second quarter, assuming we get resolution on a final design in the next few months.

Regarding manufacturing, this is the silver lining of all of this and the good news that may be have been lost, is that we had a very productive CMC meeting. We went into it hoping for flexibility from the agency on CMC issues as it relates to stability, comparability data, process validation and we were met with very positive constructive meeting where we believe CMC is not going to be rate limiting step of starting our clinical trial.

On top of that, we are continuing in earnest our plans for scale-up even plans for large scale production in 2014. In turn, we know for sure that reconsidering, right, an early filing or early approval is completely off the table. The door is open on that. I would say it’s closed more than it was obviously when they were open to considering the NDA, but we don’t want to be caught flat-footed if the FDA were to reverse themselves and say they were open, maybe because they reviewed the GSK data, maybe because we have a 120-week data that might be coming in the first quarter of next year that are opportunities for them to reconsider an early NDA filing.

Ted Tenthoff – Piper Jaffray

I’d simply go back to this Chris, because I look at the safety profile of eteplirsen granted 10 to 12 boys, however you want to look at the small end, but clearly activity on 6-minute walk – I was surprised that they brought, even kind of raised the questions around 6-minute walk as a approvable endpoint. I mean this to me is just another disappointment for the Duchenne community, frankly for parents that I know who are losing hope in the agency and in the drug discovery process. I mean it’s terrible talking to my friends who have boys with this disease and other parents that I’ve met over the years. Refresh us on the most recently phase IIb data that you provided at World Muscle. What should we be considering at 120-weeks in early 2014, because the drug appears active?

Chris Garabedian

Yes, Ted, we agree. I mean 96-week, essentially two year data of stability in every patient that was still ambulant at the time we confirmed dystrophin at 40-weeks. So from week 36 on, we only have one patient who declined more than 10% and this was a boy who broke his foot and recovered, which is almost unheard of in Duchenne, we did the 6-minute walk and came up with a score that was lower than his previous, which was essentially flat from his baseline before he broke his foot.

So this says there is no natural history that goes out two years that suggest this kind of stability even in those patients who are above 350 over seven years of age. And remember our boys now are on average greater than 11 years of age. Only three of them are nine years and older, the other nine patients are between 11 and 13 years of age.

So from that standpoint, we think it’s very compelling 6-minute walk data and we have a 120-week data that we expect would be disclosed at some point in the first quarter of next year. That would essentially be more than two years of follow-up and that’s more than any natural history study has gone out to in a comprehensive matter on 6-minute walk.

Ted Tenthoff – Piper Jaffray

Great. Do you want to make sure that if there are any questions, just to raise your hand I am happy to – yes, please.

Unidentified Analyst

If you go back to your large scale question, clearly [indiscernible] how much are you spending on your large scale in 2014?

Ted Tenthoff – Piper Jaffray

Question on spend on large scale manufacturing.

Chris Garabedian

Yes, and thanks for the question. I think the reason we’re continuing that is because the bulk of those expenses really don’t begin until we start those product runs, which were not planned until kind of mid to late next year. So we think by then, we will know if we need to turn the switch off. We think the planning aspects in locking in CMOs that can do this and it’s almost preparing the Q, so that we don’t lose that opportunity is really what we’re talking about right now.

So we think it’s very minimal impact on our finances to just keep those plans in place for now. And we hope that in the next several months when they definitely if there is – if it’s completely off the table the idea of an early NDA.

Ted Tenthoff – Piper Jaffray

You mentioned the silver lining on some of the manufacturing side, and you also mentioned some of the other exons that you are evaluating. Obviously the focus right now is getting clarity on eteplirsen in the path forward, but you have developed drugs against exon 45, 50 and I think even 53, skipping drugs. So what’s the latest on kind of those programs? Are they still proceeding in the background and maybe even closing the gap a little bit?

Chris Garabedian

Yes. Well, yes we’ve – those continue pace for what we had guided earlier which is we’ll have at least one IND filed by mid-next year and at least two or an additional ones by the end of next year. So exon 45, we are collaborating with Children’s National in D.C. and Carolinas Medical. On exon 53, we have an EU grant that also includes clinical trial funding. And those two are the second most prevalent next to exon 51.

The questions around dystrophin that the FDA raised were concerning, because it really left an uncertainty around these rare exon, let's say beyond exon 45 and 53. If they are not willing to consider dystrophin as a surrogate, then it really calls in a question well how will there be a mechanism to get other drugs approved beyond the first couple. And so that’s why we hope to convince them that we need to find a way to accept dystrophin as a marker and that’s why we still intend to capture it in our eteplirsen study because it could be the basis and foundation for looking at dystrophin as a surrogate for the subsequent populations.

But we have not slowed down or intent to slow down these follow-on exons as we continue the eteplirsen program.

Ted Tenthoff – Piper Jaffray

Great. And believe or not, we’ve already gone through most of our time. I appreciate the update. And are there any additional questions? We’ve got another. Yes, please.

Unidentified Analyst

[Inaudible - Microphone Inaccessible].

Ted Tenthoff – Piper Jaffray

Question on eteplirsen supply for the confirmatory study.

Chris Garabedian

Yes, we are on track. We are going to have the drug supply from the mid scale batches being analyzed in the first quarter. And so we would be in a position to submit that data to the FDA for drug release well in time for starting dosing in the second quarter. And again the good news is even with an increased sample of a confirmatory study because of the challenges with enrollment we see no problem with having enough drug to dose patients as they are enrolled in a confirmatory study.

As we said along, our mid scale should be more than sufficient to satisfy the clinical programs but to satisfy commercial demand. This is why we had focused on the large scale.

Ted Tenthoff – Piper Jaffray

And Sandy, I want to ask you a question on the balance sheet. You guys were able to bring in significant amount of money under the ATM. So where does the current cash position sit, and kind of walk us through how far that could last?

Sandy Mahatme

Sure. So as of the first nine months, we had announced on October 1 that we have approximately $281 million of cash. The ATM program is now closed. We raised about $125 million under the program. And as of the first nine months, we spent approximately $55 million of cash. So the $281 million should give us a significant runway for the next few years to be able to manage our expenses, especially after we get some clarity from the FDA, we should be able to ramp-up or ramp-down our expenses.

We also continue to be opportunistic in terms of the possibilities that we have in terms of accessing cash and other opportunities that we might have.

Lastly, there is another $10 million or so that should be coming in under our warrants. There is another 900,000 warrants that are still to be exercised and those would be coming in over the next eight months or so.

So again, we believe that we have significant cash runway and we’re very comfortable with our cash position. We should be guiding on next year some time in Q1.

Ted Tenthoff – Piper Jaffray

Sandy, thank you. And with that we’re out of time, but I want to sincerely thank you all for joining us about this very important, very interesting story. I am looking forward to update around the next meeting probably on the January timeframe is when we should be expecting some additional information, right?

Chris Garabedian

First quarter of 2014.

Ted Tenthoff – Piper Jaffray

Thank you so much.

Chris Garabedian

Thanks a lot, Ted.

Question-and-Answer Session

[No formal Q&A for this event]

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